The quantity theory of money states that
A) inflation increases when the money growth rate increases.
B) as the price level increases, the demand for money increases.
C) as the interest rate rises, the demand for money decreases.
D) changes in the quantity of money are determined by the commercial banks and not the Federal Reserve.
A
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________ unemployment occurs naturally in the labor market as workers search for jobs
A) Cyclical B) Frictional C) Structural D) Inflationary
Refer to Figure 11.4. Which diagram illustrates the effect of an increase in government spending?
A) A B) B C) C D) D
A technological advance that increases labor productivity will:
a. lower wages. b. decrease the demand for labor as fewer workers are needed. c. decrease the supply of labor as fewer workers are needed. d. increase the demand for labor as MP rises. e. decrease the demand for labor as MP falls.
The "new growth theory" of economic growth emphasizes the importance of
A. Household saving as a source of funds for investment. B. Investing in new plants and equipment. C. Investing in ideas. D. Borrowing funds for investment from foreign sources.